Lion Air, the Jakarta-based low-cost carrier, will use Bangkok as one of its hubs to strengthen its network connectivity.
It hopes to play a bigger role the Thai and regional aviation market, drawing on Indonesia's strength as a popular tourist destination.
It has seven hubs at home - Jakarta, Batam, Surabaya, Bali, Ambon, Makassar and Manado - and one regionally in Kuala Lumpur, where it formed a joint venture with Malaysia's National Aerospace Defence Industries to establish Malindo Air, a budget carrier.
The group also runs Wings Air, a low-cost carrier flying to remote islands. The three carriers serve 76 destinations in Indonesia, far more than any other airline.
Bangkok is deemed a strategic location to link flights from the group's affiliated airlines and also regionally with cities. In the future, it plans to serve Japan and South Korea via its full service airlines. However, it's too early to reveal details.
CEO Rusdi Kirana said the launch of Lion Air in Thailand would help attract more travellers there. Even though it is newcomer there, that's not a big barrier. The market was large enough for every airline to survive, as long as they offer effective services.
It will compete head-on with AirAsia, which has a strong foothold there. It is eager to expand its network across Thailand and in the region through the years.
Last week, it said it would fly from Krabi to Chiang Mai and also to Singapore. Early next year, VietJet from Vietnam will launch its flight there and then no doubt competition will heat up.
In Thailand, Lion Group has set up a joint venture, Thai Lion Mentari Co. It has received an air operator licence from the Transport Ministry and is working to get an operator certificate from the Civil Aviation Department.
Its inaugural flight will be from Bangkok's Don Mueang International Airport to Jakarta next month, with two flights a day. It also plans to add the Bangkok-Kuala Lumpur route with a daily service and a Bangkok-Chiang Mai route with three daily services. Other Thai provinces in its sights include Phuket, Krabi and Udon Thani.